Survey: Small business lending falls in January

NEW YORK (AP) –
Small business owners are still holding back from borrowing.

A study of small business lending released Tuesday by Thomson Reuters
and PayNet shows that owners took out fewer loans and leases during January. An
index based on the study fell to 113 from 115 in December and is virtually
unchanged from a year ago.

The study shows that owners are still cautious although some of the
political uncertainty of the last few months – the election and negotiations in
Congress over taxes – has been resolved. Many owners are concerned about the
impact on their earnings of the health care law that will take effect next
year.

And many are waiting to see whether federal budget cuts that went into
effect March 1 will take hold. Economists have forecast that hundreds of
thousands of jobs including many at small businesses could be lost as a result
of the budget cuts.

Many owners have focused on paying down their companies' debt, and
they're reluctant to burden their businesses with new loans when the future
looks uncertain.

The Thomson Reuters/Paynet study was compiled from data on commercial
loans and leases in PayNet's database. The company provides credit ratings on
small businesses.

Reports on
hiring that are due out this week will give another view of small businesses
and whether they're willing to take chances. They include reports on from the
payroll company ADP and the Labor Department.